USINSK, Russia, Nov. 22 (UPI) -- Investment in Usinsk, an oil town in Russia's most northeast European reach, is as evident as -- and related to -- the search for the country's vast crude resources.
Usinsk is the fourth-largest city in the Republic of Komi, a governmental state overlapped by the Timan-Pechora oil region and its 9.6 billion barrels of proven crude reserves, 900 miles northeast of Moscow.
The subsidiaries of two major oil firms are based in Usinsk; their hotels facing each other along the main, frozen drag, where the season's first snow fell two months ago.
Oil money makes up 80 percent of the city's budget while still more buildings and programs are bequest to the population here on the black gold dime; officials answer patronizingly when asked if the wells will ever run dry and the pocketbook close.
"I think that this is not going to happen in the next 100 years," said Sergey Nesterenko, general director of Severnaya Neft, the fastest-growing subsidiary of state-controlled Rosneft, the second-largest oil company in Russia. (Lukoil-Komi, the regional subsidiary of Russia's No. 1 oil producer has its head office here as well.)
But Severtnaya Neft's prized Val Gamburtseva fields are expected to churn out 75 percent of the company's total this year, 30 million barrels, plateau until 2009, then begin a steady decline to 7.3 million in 2020, barring any new finds.
"Of course, it is a fact that the city of Usinsk was created to take care of oil development," said Nesterenko, though optimistic of a Russian ability to adapt and find new revenue sources. "So let's not talk about such sad things."
Severnaya Neft, or "North Oil," turns out 20 percent of Timan-Pechora's total production.
Russia's has proven 74 billion barrels in the ground and, while oil production is a close second to -- and closing in on -- Saudi Arabia's 11.1 million barrels a day, undiscovered or harder to reach oil more than doubles the reserve bank.
As part of the overall Russian oil strategy, the Timan-Pechora resources make up just about six percent.
"Timan Pechora is not expected to be a major producing region in the future," Julia Nanay, senior director of PFC Energy's Russia & Caspian Service, wrote in an e-mail interview.
"But there is an undeveloped reserve base there that could contribute up to 400,000 b/d (barrels per day) over the next decade if it is developed. Beyond 2015, it is difficult to see how this region could grow production without a string of short-term large discoveries," Nanay wrote. "That being said, Timan Pechora remains important today for Rosneft, Lukoil and ConocoPhillips." (ConocoPhillips operates Timan-Pechora fields with a 50 percent stake in the Polar Lights Co., along with Rosneft, as well as a 20 percent share in Lukoil.)
Timan-Pechora produces about 500,000 barrels a day now and will double that by 2014, according to Ian Thom, an analyst with Wood Mackenzie.
Rosneft is angling Severnaya Neft for its piece of it; it recently won an untapped field that doubled the subsidiary's reserves and, along with Lukoil, is a leading contender in a December auction for two prospective sites: the Titov field with 344 million barrels and Treb with 392 million, two of the largest among 1.8 billion barrels in Timan-Pechora's undistributed reserves.
During a 30-minute tour of Usinsk, Severnaya Neft officials point to schools and numerous recreations centers, a destination for Usinsk's youth, who escape the long, dark and cold evenings in a boxing gym or basketball court, taking advantage of nearly a dozen free sports lessons.
Workers hunch over inside an emptied Soviet-era Olympic-sized swimming pool, laying new floor tiles, part of a complete renovation funded entirely by Rosneft.
An indoor ice hockey and skating rink is also on the way.
Lukoil has funded community projects and programs, too, Severnaya Neft officials said.
Both sponsor youth hockey teams sporting opposing company jerseys.
Indeed, crude has been good to the city, and the country. Revenues from oil and natural gas will make up 30 percent of Russia's gross domestic product in 2006, nearly three-quarters of export revenue and 45 percent of the federal budget, Nanay wrote.
And there are 27 trillion cubic feet of natural gas reserves in Timan-Pechora, according to IHS Energy, two percent of Russian total reserves.
It isn't economically feasible to send it to a natural gas market now, Severnaya Neft officials said, although Russia's proven natural gas reserves of 1,680 trillion cubic feet is nearly double the country with the second most reserves, Iran.
"That's for the future generations," Nesterenko said.
In a toast at a recent dinner in Usinsk, sponsored by Rosneft and attended by Severnaya Neft officials and visiting U.S. journalists, Acting Mayor Viktor Abmaev acknowledged the fortune oil resources have brought the city.
But he brushed aside questions of what comes after oil, and extended a future invitation, decades from now, to revisit Usinsk and see how it has prospered since.
A common answer of confidence and optimism found amid -- and because of -- Russia's oil wealth.
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(This is the final story of a three-part series on Russian oil.)
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(UPI Energy Correspondent Ben Lando traveled to Russia with other journalists as guests of the Russian news and information agency, RIA Novosti.)
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